(Yicai Global) May 6 -- Huaxia Life Insurance, which has recently been placed under state custody for a year as China investigates links to a business empire owned by fallen tycoon Xiao Jianhua, will divest its stake in China Minsheng Bank over the next 12 months, the private lender said yesterday.

The takeover of Huaxia Life Insurance will not have a significant impact on Minsheng Bank’s business activities, the Beijing-based bank said.

Nine financial firms, including Huaxia Life, were put under government control in July last year for hiding the identity of their controlling parties, their true holdings and poor governance, the China Banking and Insurance Regulatory Commission said last July. Xiao has been in custody since 2017.

Tianjin-based Huaxia Life Insurance has a 4.91 percent stake in Minsheng Bank worth over CNY9.6 billion (USD1.5 billion) at today’s prices.

Minsheng Bank’s Hong Kong share price [HKG:1988] dipped 0.47 percent today to finish at HKD4.20 (USD0.54). Its Shanghai stock [SHA:600016] closed flat at CNY4.70 (USD0.73).

Editor: Kim Taylor